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Share-Based Compensation | 12 Months Ended
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Dec. 31, 2014
Share-based Compensation [Abstract] |
Share-Based Compensation | Share-Based Compensation In May 2005, the Company adopted the 2005 Incentive Award Plan (the “2005 Plan”), which succeeded a prior plan. A maximum of 4,920,750 shares of common stock under the 2005 Plan are authorized for issuance upon exercise of options, stock appreciation rights and other awards, or upon vesting of restricted or deferred stock awards. As of December 31, 2014, only options and restricted stock awards have been granted under these plans. Beginning January 1, 2008, options granted, for which the Company has recognized share-based compensation expense become exercisable at a rate of 25% per year beginning one year from the date granted, are granted at the market price on the date of grant, and expire after 10 years. Prior to January 1, 2008, shares became exercisable at a rate of 20% per year.
|  | Year Ended December 31,
|  | 2014 |  | 2013 |  | 2012
|  | (Amounts in thousands)
Cash received from option exercises |  | $ | 6,247 |  |  | $ | 1,446 |  |  | $ | 2,492 |
Compensation cost |  | 4,112 |  |  | 974 |  |  | (370 | )
Excess tax benefit |  | 148 |  |  | 202 |  |  | 86 |
No stock options were awarded in 2014 and 2012. In 2013, the fair value of stock option awards was estimated on the date of grant using a closed-form option valuation model (Black-Scholes) based on the following table, which provides the weighted-average values of assumptions used in the calculation of grand-date fair values during the years ended December 31, 2013.
| 2013
Weighted-average grant-date fair value | $7.11
Expected volatility | 33.16% - 33.18%
Weighted-average expected volatility | 33.17%
Risk-free interest rate | 0.88% - 1.60%
Expected dividend yield | 5.40% - 5.76%
Expected term in months | 72
Expected volatilities are based on historical volatility of the Company’s stock over the term of the options. The Company estimated the expected term of options, which represents the period of time that options granted are expected to be outstanding, by using historical exercise patterns and post-vesting termination behavior. The risk free interest rate is determined based on U.S. Treasury yields with equivalent remaining terms in effect at the time of the grant. A summary of the stock option activity under the Company’s plans as of December 31, 2014 and changes during the year then ended is presented below:
| Shares |  | Weighted- Average Exercise Price |  | Weighted- Average Remaining Contractual Term (Years) |  | Aggregate Intrinsic Value (in 000’s)
Outstanding at January 1, 2014 | 433,750 |  | $ | 49.11 |  |  |  |  |
Granted | 0 |  |  |  |  |  |  |
Exercised | (155,050) |  | $ | 46.34 |  |  |  |  |
Canceled or expired | (30,700) |  | $ | 57.10 |  |  |  |  |
Outstanding at December 31, 2014 | 248,000 |  | $ | 49.85 |  |  | 3.7 |  | $ | 1,774 |
Exercisable at December 31, 2014 | 188,000 |  | $ | 51.86 |  |  | 2.2 |  | $ | 985 |
The aggregate intrinsic value in the table above represents the total pre-tax intrinsic value (the difference between the Company’s closing stock price and the exercise price, multiplied by the number of in-the-money options) that would have been received by the option holders had all options been exercised on December 31, 2014. The aggregate intrinsic value of stock options exercised was $1,160,000, $862,000, and $392,000 during 2014, 2013, and 2012, respectively. The total fair value of options vested was $142,000, $146,000, and $407,000 during 2014, 2013, and 2012, respectively. The following table presents information regarding stock options outstanding at December 31, 2014:
| Options Outstanding |  | Options Exercisable
Range of Exercise Prices | Number of Options |  | Weighted-Avg. Remaining Contractual Life (Years) |  | Weighted- Avg. Exercise Price |  | Number of Options |  | Weighted- Avg. Exercise Price
$33.61-47.61 | 105,500 |  | 6.5 |  | $ | 43.67 |  |  | 45,500 |  | $ | 43.86 |
$50.01-52.13 | 63,500 |  | 2.2 |  | $ | 51.03 |  |  | 63,500 |  | $ | 51.03 |
$54.93-58.83 | 79,000 |  | 1.3 |  | $ | 57.14 |  |  | 79,000 |  | $ | 57.14 |
As of December 31, 2014, $344,000 of total unrecognized compensation cost related to non-vested stock options is expected to be recognized over a weighted-average period of 2.4 years. Under the 2005 Plan, the Compensation Committee of the Company’s Board of Directors granted performance vesting restricted stock units to the Company’s senior management and key employees. The following table presents the grants summary:
| Grant Year
| 2014 |  | 2013 |  | 2012
Three-year performance period ending December 31, | 2016 |  |  | 2015 |  |  | 2014 |
Vesting shares, target (net of forfeited) | 86,500 |  |  | 80,500 |  |  | 80,500 |
Vesting shares, maximum (net of forfeited) | 162,188 |  |  | 181,125 |  |  | 181,125 |
The restricted stock unit activity as of December 31, 2014, 2013, and 2012 and changes during the years then ended is as follows:
| 2014 |  | 2013 |  | 2012
| Shares |  | Weighted- Average Fair Value per Share |  | Shares |  | Weighted- Average Fair Value per Share |  | Shares |  | Weighted- Average Fair Value per Share
Outstanding at January 1 | 170,500 |  | $ | 39.64 |  |  | 169,000 |  | $ | 42.22 |  |  | 135,000 |  | $ | 40.70 |
Granted | 93,500 |  | $ | 45.17 |  |  | 84,500 |  | $ | 36.82 |  |  | 92,000 |  | $ | 44.01 |
Vested | 0 |  |  |  | 0 |  |  |  | 0 |  |
Forfeited/Canceled | (16,500) |  | $ | 43.99 |  |  | (3,000) |  | $ | 36.82 |  |  | (3,000) |  | $ | 44.01 |
Expired | (80,500) |  | $ | 44.01 |  |  | (80,000) |  | $ | 40.22 |  |  | (55,000) |  | $ | 41.40 |
Outstanding at December 31 | 167,000 |  | $ | 41.15 |  |  | 170,500 |  | $ | 39.64 |  |  | 169,000 |  | $ | 42.22 |
The restricted stock units vest at the end of a three-year performance period beginning with the year of the grant, and then only if, and to the extent that, the Company’s performance during the performance period achieves the threshold established by the Compensation Committee of the Company’s Board of Directors. For 2012 grants, vesting was based on the Company’s cumulative underwriting income and net premium written growth. For 2013 and 2014 grants, vesting will be based on the Company’s cumulative underwriting income, annual underwriting income, and net earned premium growth. As of December 31, 2014, 7,000, 4,000, and 11,500 target restricted stock units granted in 2014, 2013, and 2012, respectively, have been forfeited because the recipients are no longer employed by the Company. The fair value of each restricted share grant was determined based on the market price on the grant date. Compensation cost is recognized based on management’s best estimate that performance goals will be achieved. If such goals are not met, no compensation cost is recognized and any recognized compensation cost would be reversed. For the 2012 grants, the achievement of the performance condition set by the Compensation Committee was no longer considered probable, and previously recognized compensation costs were reversed.

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- Definition The entire disclosure for compensation-related costs for equity-based compensation, which may include disclosure of policies, compensation plan details, allocation of equity compensation, incentive distributions, equity-based arrangements to obtain goods and services, deferred compensation arrangements, employee stock ownership plan details and employee stock purchase plan details. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 10 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6415400&loc=d3e5047-113901 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=6415400&loc=d3e5070-113901 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 50 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6406099&loc=d3e25284-112666 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 40 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6418621&loc=d3e17540-113929 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 10 -Section 50 -Paragraph 4 -URI http://asc.fasb.org/extlink&oid=6415400&loc=d3e5444-113901 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Staff Accounting Bulletin (SAB) -Number Topic 14 + Details
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